Two facilities are being investigated for an investment. The details of the twofacilities are given in the table below:
|
Facility A |
Facility B |
| First cost($) |
52,000 |
63,000 |
| Annual Maintenance & Operating costs ($) |
15,000 |
9,000 |
| Annual Benefits ($) |
38,000 |
31,000 |
| Salvage value ($) |
13,000 |
19,000 |
| Useful life , in years |
4 |
6 |
Taking the MARR (Minimum attractive rate of return) to be 10%, determine which facility should be selected using the incremental rate of return method?